Q4 2025 Regency Centers Corp Earnings Call

February 6, 2026

Operator: Greetings and welcome to Regency Centers Corporation fourth quarter 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone wants to require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Christy McElroy. Thank you. You may begin.

Speaker #1: If anyone wants to require operator assistance during the conference, please press star-zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker #1: I would now like to turn the conference over to your host, Christy McElroy. Thank you. You may proceed.

Speaker #1: begin. Good morning and welcome

Christy McElroy: Good morning and welcome to Regency Centers Q4 2025 Earnings Conference Call. Joining me today are Lisa Palmer, President and Chief Executive Officer; Mike Mas, Chief Financial Officer; Alan Roth, East Region President and Chief Operating Officer; and Nick Wibbenmeyer, West Region President and Chief Investment Officer. As a reminder, today's discussion may contain forward-looking statements about the company's views of future business and financial performance, including forward earnings guidance and future market conditions. These are based on the current beliefs and expectations of management and are subject to various risks and uncertainties. It is possible that actual results may differ materially from those suggested by these forward-looking statements we may make.

Speaker #2: To Regency Centers' fourth quarter 2025 earnings conference call. Joining me today are Lisa Palmer, President and Chief Executive Officer; Mike Mas, Chief Financial Officer; Alan Roth, East Region President and Chief Operating Officer; and Nick Wibbenmeyer, West Region President and Chief Investment Officer.

Q4 2025 Regency Centers Corp Earnings Call

Request a DemoDemo

REG

Regency Centers

Earnings

Q4 2025 Regency Centers Corp Earnings Call

REG

Friday, February 6th, 2026 at 4:00 PM

Transcript

No Transcript Available

No transcript data is available for this event yet. Transcripts typically become available shortly after an earnings call ends.

Want AI-powered analysis? Try AllMind AI →

Christy McElroy: Factors and risks that could cause actual results to differ materially from these statements may be included in our presentation today and are described in more detail in our filings with the SEC, specifically in our most recent Form 10-K and 10-Q filings. In our discussion today, we will also reference certain non-GAAP financial measures. The comparable GAAP financial measures are included in this quarter's earnings materials, which are posted on our Investor Relations website. Please note that we have also posted a presentation on our website with additional information, including disclosures related to forward earnings guidance. Our caution on forward-looking statements also applies to these presentation materials. As a reminder, given the number of participants we have on the call today, we respectfully ask that you limit your questions to one. Please rejoin the queue if you have any additional follow-up questions. Lisa?

Lisa Palmer: Thank you, Christy. Good morning, everyone, and thank you for joining us today. I'm proud to close out another outstanding year for Regency. Our success in 2025 reflects the quality of our grocery-anchored shopping centers in strong suburban trade areas, the strength of our best-in-class operating and investments platforms, and the hard work of our exceptional team. We delivered strong same-property NOI earnings and dividend growth driven by robust operating fundamentals and disciplined accretive capital allocation. Across our portfolio, we continue to see healthy demand for our space, historically low bad debt, and continued growth in tenant sales and foot traffic, reinforcing the durability of our portfolio and the essential nature of the real estate we own. On the investments front, 2025 was another very active year for Regency, highlighted by accretive acquisitions and strong execution across our development and redevelopment programs.

Lisa Palmer: We had another excellent year growing our development pipeline with more than $300 million of new project starts. Over the past 3 years, we've started more than $800 million of new projects. And importantly, that pipeline is now translating into deliveries that will contribute meaningfully to total NOI growth in 2026 and beyond, providing strong visibility into our forward growth. REGENCY's ground-up development platform continues to be a primary driver of our external growth and a key differentiator for the company. New retail development remains really difficult across the industry, and this is evidenced by historically low supply growth over the past 15 years. In that environment, REGENCY is uniquely positioned leveraging our expertise, long track record, access to low-cost capital, and longstanding tenant relationships to source and execute on opportunities to build high-quality shopping centers at meaningful spreads to market value.

Lisa Palmer: This allows us to create long-term shareholder value while amplifying our NOI growth profile. In closing, the broader backdrop remains favorable. Physical retail, particularly well-located grocery-anchored real estate like we own, continues to benefit from this limited new supply and a renewed appreciation among retailers for the role of stores. Strong tenant demand is driving rents and occupancy higher, and our substantial free cash flow and fortress balance sheet provide the foundation to continue investing capital accretively through the cycle. Our portfolio, development platform, balance sheet, and team together are unequaled and give us an advantaged position. I'm very proud of the results our team delivered in 2025, and we are carrying that momentum into 2026 and beyond. With that, I'll turn it over to Alan.

Alan Roth: Thank you, Lisa, and good morning, everyone. 2025 was one of the strongest operational years we've ever experienced as a company. We achieved remarkable Same-Property NOI growth of 5.3%, supported by substantial base rent contribution, including meaningful occupancy commencement, and redevelopment impact. Impressively, our average rent commencement rate for the portfolio increased 150 basis points year over year, a testament to our team's ability to accelerate the rent commencement of tenants within our SNO pipeline and to successfully deliver redevelopment projects. Tenant demand remains strong in nearly every category and across our portfolio, spanning both anchor and shop space. Shop momentum was especially impressive in the fourth quarter as we leased our largest percentage of vacant shop GLA in more than five years, an increase in same-property shop occupancy by 40 basis points, reaching yet another new record for us of 94.2% leased at year-end.

Alan Roth: Our grocery leasing activity in the quarter was significant, signing leases with Whole Foods, Sprouts, and Trader Joe's, among others. Beyond groceries, we're continuing to see meaningful engagement and momentum from other anchor tenants such as TJX, Nordstrom Rack, Ulta, Ross, Burlington, and Williams-Sonoma, to name a few. Anchor leasing is one of our greatest opportunities to drive our portfolio occupancy beyond prior peak levels, and we are encouraged by the quantity and quality of the prospects for our high-quality anchor space. Our SNO pipeline at year-end was approximately $45 million of incremental base rent. We made substantial progress commencing tenants in Q4 while simultaneously backfilling the pipeline with strong new deals. In addition, we are also seeing a continued trend of tenants inquiring about and signing leases on currently occupied space.

Alan Roth: This is a testament to the desirability of our centers and the lack of available quality retail supply in our markets. Our rent growth also continues to benefit as high-quality retail space has become more limited. We achieved impressive cash rent spreads of 12% in Q4, including renewal spreads at a record 13% in the quarter. GAAP rent spreads of 25% in Q4 also marked an all-time high, underscoring the depth of embedded mark-to-market in our portfolio combined with the benefit of annual rent escalators. Notably, more than 95% of negotiated leasing activity in 2025 included annual steps, further strengthening future rent growth. In closing, we are excited about the significant momentum we see into 2026. Demand for our space is robust, with operating fundamentals as strong as they've ever been.

Nick Wibbenmeyer: Thank you, Alan, and good morning, everyone. 2025 was a tremendous year for our investments platform, both in terms of volume and quality. We deployed more than $825 million into accretive investments, including more than $500 million of high-quality acquisitions and $300 million in development and redevelopment projects in top markets around the country. In 2025, we started 24 development and redevelopment projects across 16 markets, with the majority of invested capital into ground-up developments. These projects are creating real value for our shareholders, with ground-up development returns north of 7% at meaningful spreads to market cap rates. In the fourth quarter alone, we started more than $90 million of ground-up projects, including Oak Valley Village in Southern California, anchored by Target and Sprouts, and Lone Tree Village, a King Soopers anchored center in Denver.

Nick Wibbenmeyer: Importantly, our team is also delivering and bringing these projects online, including the completion of 13 development and redevelopment projects in Q4, totaling more than $160 million at attractive 9% blended returns. These projects are more than 98% leased, and with many delivered ahead of schedule and several anchors opening early. Even with the high volume of completions, we are also backfilling our future pipeline. Our team continues to have great success sourcing and starting new projects, and our in-process pipeline remains strong at nearly $600 million. This includes several on track to reach 100% leased before the anchor even opens. Looking ahead, we believe we have good visibility into project starts of nearly $1 billion over the next 3 years.

Nick Wibbenmeyer: Our success has led to even greater momentum, and our opportunity set has only grown, with projects in the works across the country with top groceries in strong suburban communities. Our development platform is a distinct advantage for Regency, fueling our external growth engine. Our deep tenant relationships, access to capital, and experienced team around the country enable us to execute on projects at a time when few others can. In closing, I'm incredibly proud of our team's execution and accomplishments in 2025. It has been extremely gratifying to see our hard work come to fruition, along with excitement from our local communities and tenants as these projects come online. Our success spans across the country, from recent groundbreakings in Denver, Jacksonville, and Southern California to grand openings of H-E-B in Houston, Whole Foods in Connecticut, Publix in Atlanta, and Safeway in the Bay Area, among others.

Michael Mas: Thank you, Nick. Again, Regency delivered exceptional results in both the fourth quarter and for the full year. We achieved Nareit FFO per share growth of close to 8% and core operating earnings per share growth of nearly 7% for the full year, driven by continued strong operating fundamentals and substantial external growth from accretive, high-quality acquisitions and development projects. Same-property NOI growth finished north of 5% and was largely driven by our success growing commenced occupancy, pushing rents and recoveries higher, and experiencing historically low levels of uncollectible lease income. Turning to 2026, our guidance is consistent with the expectations we outlined on our October call, reflecting continued strong momentum across all facets of our business. I'll refer you to pages 5 and 6 in our quarterly earnings presentation for a summary of our assumptions and the primary drivers of our forward growth outlook.

Michael Mas: Our Q2 growth rate is expected to be below our full-year guidance range, largely due to a tough comparison related to our annual CAM reconciliation process that we discussed last year. Beyond Same-Property NOI, total NOI growth will benefit significantly from strong external growth this year, including the substantial progress we've made delivering ground-up development projects and sourcing accretive acquisitions. Our forecast for earnings also includes a 100 to 150 basis point anticipated impact from debt refinancing activity, again as discussed in October, excluding which the midpoint of our guidance would be in the mid-5% to 6% area, reflecting a continued strong fundamental backdrop. As a reminder, and consistent with past practices, we do not include speculative acquisitions in our guidance, but our team is active in the market sourcing opportunities that meet our quality and accretion requirements. We will keep you updated as transactions are contracted and closed.

Michael Mas: As Lisa and Nick described today, ground-up development remains the prioritized and most visible driver of our external growth, and our near-term deliveries and growing pipelines are evidence of our strong position in the marketplace as a developer of choice. Importantly, our balance sheet and liquidity position remain a source of competitive strength, enabling us to remain opportunistic and execute on our development pursuits, acquire properties, and achieve favorable debt and refinancing terms. We have A3, A-minus credit ratings from both Moody's and S&P, leverages within our targeted range of 5 to 5.5 times, free cash flow generation is strong with no need to raise equity or sell properties to fund our investment pipeline, and we have nearly full availability on our $1.5 billion credit facility. In closing, we are looking at a future from a position of significant strength operationally, financially, and strategically.

Nick Wibbenmeyer: Yeah, Samir, good morning. This is Nick. I'll take the question and appreciate the question. Look, the reality is we are seeing demand in our sector continue to grow for a lot of good reasons. There's a lot of investors looking to invest in grocery anchored real estate at the moment. And so we are seeing a broad range of opportunities. In the 5% to 6% cap range is the range I would give you. But as we've always said, and I appreciate you reminding everyone, we don't guide acquisitions because we don't have to do them in our fundamental business plan. And so we will lean in when we can find opportunities that are equal to our quality and our growth profile, and very importantly, that we can fund accretively. And so those are the ones we're focused on.

Nick Wibbenmeyer: As you alluded to, we were very successful in that in 2025, finding over a half a billion dollars of those. And our team's actively pursuing opportunities around the country right now. We do not have anything under contract currently, or we would guide to that, as you're aware. And I do expect we will find some needles in the haystack out there as we continue to look throughout the country. But as we've continued to talk about, we're going to continue to focus our capital on the development program, where we're getting development yields north of 7%, and we're very excited about that opportunity set as well. And so feel really good about the development program and also confident we will find some acquisitions that meet our thresholds in 2026.

Lisa Palmer: Hi, Michael. I'll start with the bigger picture and then toss it to Alan for specific Regency impacts. Short answer is Amazon still owns Whole Foods, and we are really encouraged with this announcement that they're leaning in even more into expanding Whole Foods, one of our best customers. This is certainly not a pullback from a physical store location. It's just a rebranding of where they do have stores. So we're really encouraged by that. The grocery business has always been tough. We know that. It's why our strategy is to ensure that we're investing with the top brands and then also the banners within those brands and then also the top sales productivity of those chains themselves. It's been a winning strategy for us, and we expect that will continue.

Nick Wibbenmeyer: Yeah, absolutely. Appreciate it, Cooper. And so as Mike alluded to, strong starts in 2025 with over $300 million, and those continue to lean more into ground-up development. So as we look at 2025, 75% of those starts were ground-up development. And as we look forward into 2026 and beyond, as I articulated in our prepared remarks, we believe we can be on a run rate here as we look at our shadow pipeline of $1 billion over the next three years of new investment. And I would think that approximately 75% of those being ground-up developments is a good placeholder in your mind. And so that's why we continue to be excited about not only the projects we've started, but this future pipeline that we have very good visibility to.

Alan Roth: Craig, good morning, and thank you for the question. I appreciate you pointing out the shop occupancy. It's one thing that I take pride in smiling about the success that the team has had. We are at peak. We did break another record, but I've had the good fortune of saying we broke a record again. So I am absolutely not putting a ceiling on that. Despite that peak occupancy, it did grow 70 basis points year-over-year. The demand is still there, and the lack of supply is real. The 1 million sq ft that we have in negotiations across all regions, and our teams are, as you pointed out, proactively leasing space. It was really all of the above of what you defined. Generally speaking, look, merchandising is really important to us. Qualifying for the right operators and driving accretive returns is certainly the goal.

Alan Roth: So we are, in many instances, driving higher rents, but to the extent that it makes more sense after getting into that negotiation to keep a tenant in place, we will certainly do that as well. So I would say it's rarely a stalking horse situation. We will typically commit to who we think is right for the asset, right for the community, and right for Regency. But I remain really encouraged in terms of where we are on the shop front. The term fee actually, Alan, you didn't answer that. I think that was your third question. Really well done. Kind of getting them all in, Craig. TBD, again, it will depend on the circumstances of where we are. If there's significant term that remains and there's an opportunity to negotiate something that is favorable for all of us, we will evaluate all of those on a case-by-case basis.

Alan Roth: Hey, good morning. So based on some recent retailer earnings and commentary, it appears we might be seeing some early signs of softening consumer resilience. Now, obviously, spreads were good this quarter, and development leasing seems to be going really well. But have you noticed any changes in store openings or closure discussions with tenants or the types of tenants looking to open and close? Is there any updates to your tenant watchlist? Thank you. Greg, good morning, and thanks for that question. Look, I guess I would first start so tenant health, our ARs are below our historic norms. Our sales continue to trend up. Our foot traffic continues to trend up. So as we kind of look at it from a look-backwards basis, I'm really comfortable with where we are. On a go-forward basis, I'm going to look at my pipeline, right?

Nick Wibbenmeyer: Hi, thanks. Good morning. I wanted to ask about development, and you talked about the favorable backdrop for development and for Regency, how it's a key differentiator and what's been a low supply growth environment in general. Historically, developers seek favorable risk-reward opportunities, and the narrative around low supply growth seems broadly understood. You talked about the strength and demand from grocers and shop tenants. So is development activity poised to increase? Do you see the competitive landscape changing at all for new development sites more broadly as you look out over the sort of next couple of years? Do you think that development activity in the open-air space starts to accelerate a little bit? Morning, Todd. This is Nick. I appreciate the question. The answer is yes, but with an asterisk.

Nick Wibbenmeyer: There's no question we're seeing tremendous demand, as Alan just articulated, and as we're seeing in our development pipeline in terms of not only the velocity of new starts, but the velocity of the lease-up of those projects matching and/or sometimes marginally beating our underwriting. And so we feel really confident in what we're working on and the underlying demand. And do I think there's going to be continued growth in the developments? Yes, but coming off a very low number. And so we are doing a large portion of the development around the country. But when you compare that amount of supply compared to the existing supply, it's a very, very small amount in the grand scheme of things. So yes, I think we're going to see more opportunities. Yes, we're excited about the developments we're working on.

Alan Roth: Great, thanks. Alan, I wanted to go back to some of your comments during the prepared remarks, particularly around kind of occupancy and to be able to drive that on the anchor leasing side. It clearly seems like, from a landlord perspective, just given the favorable supply-demand backdrop, you've probably got some decent leverage. So, not asking you to give away the secret sauce, but could this maybe translate into whether it's shorter options that you're negotiating, maybe embedding some rent escalators? I know some of those grocery anchor leases can be flat for a pretty long period. Just give us a sense maybe of how you're able to leverage sort of the demand environment you're in to build that occupancy, particularly as it relates to the anchor leases. Thank you. Yeah, Michael, thank you for that question.

Michael Griffin: Great, thanks. Alan, I wanted to go back to some of your comments during the prepared remarks, particularly around kind of occupancy and to be able to drive that on the anchor leasing side. It clearly seems like, from a landlord perspective, just given the favorable supply-demand backdrop, you've probably got some decent leverage. So, not asking you to give away the secret sauce, but could this maybe translate into whether it's shorter options that you're negotiating, maybe embedding some rent escalators? I know some of those grocery anchor leases can be flat for a pretty long period. Just give us a sense maybe of how you're able to leverage sort of the demand environment you're in to build that occupancy, particularly as it relates to the anchor leases. Thank you.

Alan Roth: So a few questions ago, we talked about shop occupancy being at peak levels. We do see runway on the anchor front. We've got about 50 basis points of spread to get us back to that peak level. And so I'm really encouraged, and you heard in those opening remarks, the comments of Whole Foods, Traders, Sprouts, and grocers that are being executed for that space. But I would say first and foremost, it's quality. And that's where we have kind of the leverage of being able to choose who do we want to really interact with. And I look at our pipeline of anchors that are in negotiation: PJ Superstore, Our House, Pottery Barn, Total Wine. I mean, I'm going non-grocery now, and that list continues on. And so I feel really comfortable about that. There is an opportunity, certainly, to lean more into the rent spread nature of it.

Michael Mas: Sure. From a commenced occupancy rate, let's first go back and just think about the material movement we made in 2025. So we moved to commenced occupancy by 150 basis points on average over the course of the year. That's what contributed to that outsized same property growth, namely coming from base rent and recoveries, all driven by that material increase in occupancy. As Alan has talked about today, we're approaching kind of peak occupancies, certainly in shop space, got some room to run in anchors, and we'd like to think we can continue to move that needle. When I think about the guide and the mid-3 area, I would characterize it as us continuing to kind of grind out commenced occupancy increases by compressing that SNO pipeline that we've built. It's currently standing at 240 basis points. Our average on a stabilized basis should be closer to 185 area.

Nick Wibbenmeyer: Sure. Appreciate the comments, Floris, and appreciate the question as always. So you're absolutely right. Look, and going back to kind of Lisa's comment earlier, we're in the great position to not be either/or. And so the reality is every time we can find an opportunity to invest in our existing portfolio creatively, we're going to take advantage of that. And our teams are motivated and focused on doing that every day. And so we continue to, as I alluded to earlier, we continue to have our eyesight at $1 billion over the next three years. And of that, I think assuming about 25% of that is in the redevelopment bucket is the right place to think in terms of just generally where we expect that capital to be spent. But again, our teams are looking every day at those opportunities.

Nick Wibbenmeyer: Ronald, I'll start with the first question and then let Mike fill in on the second. So you're absolutely right. I mean, the good news of where we sit right now is from a value creation perspective, we are seeing cap rates continue to get pushed down for core grocery anchored assets. Those are exactly the assets that we're coming out of the ground with and completing. But our sights continues to be at 150 basis point-plus spread in terms of what we think our going-in yield on development should be compared to a core acquisition. These developments take years to put together and start and come online. So we are not moving our sights daily on a development like we are in the acquisition world, which is a little more fluid.

Lisa Palmer: Yeah, I'll take it. Our strategy has not changed over the many years that I've been here. Dispositions can and will be part of every year. We view it as a way, when we're deciding on whether to sell a property, is it something that's either non-strategic that we acquired through a portfolio, something that's non-core, or perhaps something that we believe that the future growth isn't consistent with our expectations for our portfolio? And that's how we look at it. We believe it is key to fortifying the future growth rate of the entire portfolio as a whole. There are some years where we have more. Some years we have less. Don't necessarily view it as a source of funding for our development program because our free cash flow does that.

Alan Roth: Let me start with why we handled it the way we did it in our materials, and then Nick will color up the actual investment. But it's a unique opportunity, and it's not quite an acquisition, and it's not quite a ground-up development. It's very classically a redevelopment, but it's an acquired redev. We're starting the project day one. We're going to reach stabilization in what I would call a normal timeframe for a ground-up development project. And so given that the cash flows kind of resembled an investment of a development, we're going to put it right into that pipeline from day one. It won't be the same property. It won't impact the same property growth until well past stabilization. We just felt like that was the best bucket for it. Nor does its acquisition cap rate really match what you would consider a market cap rate.

Nick Wibbenmeyer: Yeah, Mike, we're really excited about the investment. I mean, when you just step back and again think about our platform, we have a lot of tools in our tool belt. And so as you've heard us articulate about 30 times today, ground-up development is one of them. We can go source our own ground and build an entire shopping center, which we're very active in doing. And on the flip side, we can acquire a core asset, but then we can do everything in between. And this one is exactly in between. We found a very underutilized piece of real estate on Long Island, and we've now acquired it. But as Mike alluded, it's very much in our minds similar to a development where before we close, we've locked up an anchor tenant. It will be anchored by Whole Foods. We've fully entitled it.

Alan Roth: Hey, Paulina. It's Mike. Appreciate the question. You're right. In our recent history, we have had a track record of more material outperformance. And I think it goes back to my comments on the more material changes that are occurring in the portfolio from a commenced occupancy rate. At the end of the day, that's going to be the biggest lever from an internal growth perspective is what changes in commenced occupancy. We talked a little bit about our base case outlook for the year being flat to slightly positive on that front. So I think my comment would be the opportunity set within internal growth is less than it has been. We're going to keep leaning on renewal rates. As I said, we're going to move commenced occupancy up. Where we fall on ULI, it would be another factor.

Michael Mas: Hey, Paulina. It's Mike. Appreciate the question. You're right. In our recent history, we have had a track record of more material outperformance. And I think it goes back to my comments on the more material changes that are occurring in the portfolio from a commenced occupancy rate. At the end of the day, that's going to be the biggest lever from an internal growth perspective is what changes in commenced occupancy. We talked a little bit about our base case outlook for the year being flat to slightly positive on that front. So I think my comment would be the opportunity set within internal growth is less than it has been. We're going to keep leaning on renewal rates. As I said, we're going to move commenced occupancy up. Where we fall on ULI, it would be another factor.

AllMind AI

AllMind AI

Q4 2025 Regency Centers Corp Earnings Call

Event Details

Regency Centers

Q4 2025 Regency Centers Corp Earnings Call

Open Event Documents

Search Transcript

Regency Centers

Q4 2025 Regency Centers Corp Earnings Call

Transcript

No Transcript Available